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This bull cycle has been markedly different from previous ones. Historically, altcoins have tended to follow Bitcoin’s lead, rallying alongside it. However, this time around, Bitcoin appears to be decoupling from the rest of the cryptocurrency market.
Bitcoin has set multiple all-time highs (ATHs) during this run, yet the majority of altcoins remain significantly behind—many still 70% below their ATHs from the 2021 bull market.
The image below highlights the ongoing struggle of altcoins across major sectors within the cryptocurrency space (data as of February 5, sourced from @MilesDeutscheron X).
Notably, only two coins on this list—Mantra (OM) and, of course, Bitcoin—are within 10% of their ATHs. Our primary focus remains on Bitcoin. We have consistently advocated for holding Bitcoin as the majority allocation in a portfolio, and for good reason.
While altcoins can and do outperform Bitcoin at times, these periods of outperformance tend to be short-lived. Over the past three months, we’ve seen memecoins dominate, with BONK, PEPE, MOG, PENGU, SPX6900, and several others hitting new ATHs. However, many of them have since dropped over 80% from those highs. Meanwhile, Bitcoin—despite experiencing multiple ATHs in the same period—has only retraced by around 10%.
Major Altcoin Struggles
Major Altcoin Struggles
Let’s examine two of the biggest altcoins: Ethereum (ETH) and Solana (SOL), ranked second and fifth by market cap, respectively.
Solana set several new ATHs this cycle but has already retraced over 30% from its peak, which was reached less than three weeks ago. Ethereum, on the other hand, has struggled even more—not only lagging behind Bitcoin, but also failing to keep pace with Solana and Ripple. ETH remains 44% below its 2021 ATH of $4.9k.
A 30–40% drawdown might not seem catastrophic at first glance, but let’s consider the data in the table below:
This table illustrates the percentage gain required to recover from a given drawdown. For example, Solana now requires a 43% increase just to return to its ATH, while Ethereum needs 67%. As the drawdown deepens, the recovery percentage required grows exponentially.
Why Does This Matter?
Why Does This Matter?
Bitcoin is the only consistent long-term performer. Unlike altcoins, which experience short-lived pumps and deep drawdowns, Bitcoin has repeatedly proven itself as a resilient and appreciating asset over time.
Institutional adoption is reshaping the market. With ETFs and major financial institutions allocating capital, Bitcoin is attracting unprecedented inflows—while altcoins remain largely speculative and underfunded in comparison.
Deep drawdowns require exponential recoveries. The lower an asset falls, the harder it is to reclaim previous highs. A 70% drop means a required 233% gain, while a 90% crash demands a near 900% rally—an unlikely feat for most projects.
Bitcoin should be the foundation of any serious portfolio. While altcoins can offer short-term trading opportunities—where profits are best rotated into Bitcoin—BTC remains the most reliable asset for long-term wealth preservation and growth.
Stormrake Spotlight: Ethereum (ETH) ($2,688)
Stormrake Spotlight: Ethereum (ETH) ($2,688)
Ethereum is currently trading around the key support level. If ETH can establish a base here—where major players appear to be accumulating—it could help restore confidence among retail investors.
BTC/USD Key Levels and Price Action:
BTC/USD Key Levels and Price Action:
In the past 24 hours, Bitcoin attempted to break above its range, reaching a high of $99k, but was rejected at a critical CPR pivot level. This led to a pullback, with BTC retesting the lower range at $95.7k before bouncing. Should this level fail to hold, a further decline toward $92.5k is possible.
BTC Total ETF Flows for 6 Feb: $ - 37.0 million
(ETF flow data is sourced from https://farside.co.uk/btc/ and reflects figures at the time of writing.)
ETH/USD Key Levels and Price Action:
ETH/USD Key Levels and Price Action:
Ethereum recently retested the key level of $2,865 but failed to break above it for the second time in recent days. Since then, ETH has dropped below both the 21 EMA and 55 EMA, flipping momentum in favour of the bears. If bearish pressure continues, we could see ETH test the next major support at $2,556.
ETH Total ETF Flows for 6 Feb: $ (data not available)
(ETF flow data is sourced from https://farside.co.uk/eth/ and reflects figures at the time of writing.)
*All prices are denominated in USD unless stated otherwise*
Written by Alexandar Artis
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